As part of its debt reduction exercise, GVK Power & Infrastructure Ltd, which leads a consortium owning Bangalore International Airport Ltd (BIAL), through wholly owned subsidiary GVK Airport Developers, has announced it will sell a 33% stake in the airport operating company to Prem Watsa promoted Fairfax India Holdings Corporation and Fairfax Financial Holdings Limited for Rs. 2,149 crore (approx $321 million). The deal will be executed through wholly-owned subsidiaries in Mauritius.
GVK airport developers had selected Fairfax from the many offers to the financing process it had initiated last year to reduce its debt obligations. On completion of the transaction, which is subject to “customary closing conditions and third party consents”, the debt at GVK would reduce by approximately Rs 2,000 crore which is expected to reduce the interest burden by about Rs 300 crore per year.
The announcement confirmed Mr. G.V. Sanjay Reddy would remain as Managing Director of BIAL and Dr. G.V.K. Reddy would remain as co-Chairman.
The company has embarked on an expansion of Bangalore airport, including building a second runway and terminal.